The research on KPIs has undergone substantial developments for the past few decades. Different users of KPIs often define the KPIs from different perspectives. Generally speaking, KPIs are quantifiable variables that indicate the efficiency and effectiveness of the performances of a product, a system, or personnel. Managers may use them to evaluate the performance of their team members in order to keep them on the right track; employees can use them to monitor his/her own performances and adjust accordingly; customers can use them to select their ideal products. This thesis focuses on developing KPIs for a department.
Currently, the methodologies of developing KPIs for a department are very limited. The dominate methodologies in both the research and practical world are Business Scorecards and Six Sigma. Both of them define the performance measurements from a high business level instead of providing much technical know-hows. Also, neither of them has addressed on how to prioritize the performance measurements. This thesis work proposes a new framework to systematically develop KPIs for a department utilizing Environment-Based-Design (EBD) methodology by treating “Designing KPIs for a department” as a design problem. A case study of applying the proposed framework on an engineering department of an Engineering, Procurement and Construction (EPC) project in the oil and gas industry is also included in this thesis.